Fed Props Up Chrysler with $4.96 Billion

DETROIT and AUBURN HILLS, MICH.: Feds approved an exchange offer for General Motors this week and OK’d debtor-in-possession financing for Chrysler, which declared bankruptcy April 30. Chrysler was approved for as much as $4.96 billion from the U.S. government as it works through Chapter 11.

The DIP financing was approved by a federal bankruptcy judge yesterday, according to several published reports. The judge dismissed the objections of three Indiana pension funds that challenged the government over the sale of Chrysler. The car company was also granted emergency approval for GMAC to provide financing for dealers and customers.

General Motors meanwhile said that the Securities and Exchange Commission declared its $27 billion exchange effective. GM filed a registration in February for an exchange offer on $27 billion worth of its unsecured public notes and related consent solicitations. – Deborah D. McAdams